Finding Text
FINDING 2024-001 – Notification of Loan Disbursements
Federal Agency: U.S. Department of Education; Office of Federal Student Aid
Pass through Entity: Not applicable
Program Name: Federal Direct Student Loan Program
ALN and Program Expenditures: 84.268 ($5,702,366)
Award Number: P268K242030
Federal Award Year: July 1, 2023 to June 30, 2024
Questioned Costs: N/A
Condition Found:
The University could not provide documentation that the required loan disbursement notifications were made to the student at the time disbursement for the forty-one students who received Federal Direct Student Loans in our sample. This represented the entire population of students who received Federal Direct Student Loans in our sample.
Criteria:
Since the University uses active acceptance, the University is required to report to the students in writing the anticipated date and amount of the disbursement, the student’s or parents’ right to cancel all or a part of the loan and have the loan proceeds returned to the Department of Education, and procedures and deadlines by which the student or parent must notify the institution that want to cancel the loan no earlier than thirty days before the disbursement is made or thirty days after.
Cause:
As part of the change to a new Financial Aid Management Software, the University was not made aware that Loan Disbursement Notifications were not automatically sent at the time of disbursement. This was the case with the prior software system. As such, the University was unaware that Loan Disbursement Notifications were not sent to students when disbursing loans during the award year.
Possible Asserted Effect:
The students were not aware of the option to cancel a Federal Direct Loan disbursement and the procedures and deadlines for canceling the loan disbursement.
Repeat Finding:
There was not a similar finding in the prior year.
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendation:
The University discovered the software error in July 2024. The software error has been corrected. Loan disbursement notifications are automatically being sent to students for the Fall 2024 disbursements. We recommend continually checking the software systems to verify the loan disbursement notifications are being sent. Documentation of the notifications should be kept on file.
Management Response:
Management agrees with the auditors’ finding and their recommendation. The Financial Aid Office discovered the error in July 2024 before the audit began. Up to that point, the Financial Aid Office believed the software was automatically sending loan disbursement notification emails. The Financial Aid Office worked with the information technology staff to correct the software error. Loan disbursement notification emails are being sent timely as of August 2024.